3 Simple Ways to Build Wealth

No, It Will Not Take African Americans 228 Years To Build Wealth

Andre has over 10 years of experience in Tech and Start-ups ranging from the advanced tech in the US Air Force to building his own educational software company Live 2 Learn Differently. His is a proud graduate of Morris Brown College and Cornell University.

Recently there has been a wave of talk and outrage, concerning wealth among different demographics. In these articles and most studies, minorities are compared to whites in the United States as a measurement, of what wealth or the standard of wealth looks like.

A recent study quoted by the WSJ states that it would take minorities 228 years to attain the same level of wealth as their white counterparts. The study itself focuses mainly on African Americans. These studies were produced and released by the Institute for Policy Studies and the Corporation for Economic Development. The study focused on the 30 years between 1983-2013, it observed that the wealth of whites increased over that period by 84%, 1.2 times the rate of Latino families and three times the rate of black families.

Since the study has been released, it has been used by some activists as a justification to push for reparations as a solution to close this gap. Others are discussing whether or not the spending and saving habits are different among the various demographics and whether it affects wealth.

There are, of course, many different factors that contribute to wealth, and the primary focus is the ability to pass down this wealth to the next generation and so forth. One of the main staples used to attain wealth in America is through home ownership and by and large this has been a challenge for minorities, in the past redlining policies prevented minorities from purchasing homes and in some areas, discrimination still remains.

The same policies that affect bank lending and funding also influence the ability of minorities to borrow to expand small company payroll, market their business, increase hiring and more. According to most studies, there are clear and present challenges to minorities gathering wealth. Many of these challenges are not necessarily going to be overcome by policy changes, because most policies in 2016 don’t directly affect, provide or prevent wealth, but rather leave it mostly to the individuals and businesses in how they relate to each other throughout the economy. There are a few ways, however, that one can begin to build wealth, without tons of money. Let’s take a look at three simple ways below.

Invest in the stock market a little over time. There are mobile apps that allow you to invest your spare change monthly or weekly into the stock market. This may not seem like a lot, but based on the principals of compound interest, investing $10 per week for 10 years, at a return of 6% can create a nest egg of about $7,000.00. Imagine if you were able to spare and invest just $100.00 monthly, then imagine you continued to do so up until retirement. Acorns and Digit are both companies that allow you to invest your spare change on the stock market, more than likely there are even more out there to take advantage of.

Buy and hold land. Many people focus solely on using their home to create equity as the source of wealth while forgetting about land. Houses however typically depreciate more than land, especially in growing areas, where developers tend to over build until they hit a slump.

Land is different. New land is not being created, for the most part, what we have now is what is available and what we have until the end time. The barrier to owning land in America is relatively low due to America’s main focus and staple culturally being land ownership. In some cities, you can buy land for as low as $500, right in the middle of suburban towns and neighborhoods. Land outside of cities is often sold in bulk for much cheaper than land within the city. Often land can be bought free and clear for less than an annual tax refund. Go to realtor.com and change your max price to $10K or less and you’ll be surprised at the low prices on land you’ll find in most areas around the United States.

There are of course many other websites and ways to buy land. You could also, visit your cities website in search for land that is being auctioned off.

Start a business or invest in businesses. We all know the story of those who get in on the ground floor of start-ups that later make it big. This isn’t a surefire way to wealth, but there is never a surefire way.

Investing a small amount into companies with friends could pay off in a major way. College students in Silicon Valley are taking advantage of this, the same way restaurants and barbershops have been started for many years. You can, of course, invest in friends and family businesses, but there are also numerous micro-investment companies that allow you to invest in small start-ups.